“Polls over the last few days have shown clearly that the general public believe MPs should be able to vote how they like regarding an EU referendum.”

But Mr Cameron insisted voting to leave Europe at a time of financial crisis would be like deserting your neighbours when their houses are on fire when you should be helping and stopping it from spreading to your home.

Foreign Secretary William Hague told MPs a referendum on our future in Europe was the “wrong question at the wrong time”.

With the euro in meltdown, and Britain having to stump up billions to keep it afloat, the row looks set to drag on.

After the economy, it could turn out to be one of the biggest issues to dog Mr Cameron’s premiership.

LIAM Fox finally quit the Cabinet today after the secret money trail which funded his Best Man’s globe-trotting was exposed.

The Defence Secretary was forced to go as wealthy backers claimed he asked Tory donors to help pay for Adam Werrity’s travels.

Dr Fox (pictured left) had clung on to his job after more than a week of damaging revelations of how his 34-year-old ex-flatmate posed as an unofficial adviser and accompanied him 18 foreign trips in 16 months.

But he was left with no choice but to resign tonight after it emerged he had solicited money to foot the £157,000 bill for Mr Werrity to fly the world with him.

Venture capitalist Jon Moulton, who gave up to £35,000 towards the trips, is said to have claimed that Dr Fox asked for the cash.

All week, political commentators have warned it was the money which could be the minister’s downfall – and so it proved.

The cash revelations left him open to accusations of a conflict of interest and he threw in the towel.

In his resignation letter, Dr Fox said it was in the “national interest” that he should go because he had allowed personal interests and government activities to become “blurred”.

Mr Werrity, who did not work for the government and had not been security vetted, had linked up with his close pal on trips across the world, including to Sri Lanka and Washington.

Dr Fox is the first Tory to quit the coalition Cabinet – the only other casualty was Lib Dem David Laws who resigned last year over revelations he claimed £40,000 of taxpayers’ money to pay rent to his boyfriend.

David Cameron swiftly replaced Dr Fox at the MoD with Philip Hammond, who is seen as a safe pair of hands ripe for a higher profile job.

The PM also took the opportunity to promote two young women.

Justine Greening replaces Mr Hammond at the Department of Transport, swelling the female ranks of the Cabinet.

KITTEN-heeled Theresa May got in a right cat flap with Cabinet colleague Ken Clarke today – over the Human Rights Act.

The Home Secretary had her claws out after he poured scorn on her claim that an illegal immigrant dodged a deportation order to look after his pet pussy.

Home Secretary Theresa May chats to David Wooding in her office.

Mrs May had seized on the story to highlight her opposition to the controversial laws in a speech to the Tory conference in Manchester.

She won a standing ovation when she told of “the illegal immigrant who cannot be deported because – and I’m not making this up – he had a pet cat.”

But moments later, Cabinet top cat Mr Clarke stamped all over her claim with his size 11 Hush Puppies by claiming she had over-hyped the story.

The Justice Secretary declared: “I will have a small bet with her that nobody has ever been refused deportation on the grounds of a cat.

“I’ve never had a conversation on the subject with Theresa, so I’d have to find out about these strange cases she is throwing out. I cannot believe anybody has ever had deportation refused on the basis of owning a cat.”

He later quipped: “I heard Theresa refer to it and I sat there with a Victor Meldrew reaction. I thought… I can’t believe it.”

Mrs May was privately furious at the cat-astrophic intervention by Mr Clarke, who’s had a ban run of his own over his “soft” stance on prison sentences.

It was the fist Cabinet bust-up since the rally opened on Sunday and tonight both sides were hurling details of the case at each other to defend their corner.

A Home Office source said the case highlighted how illegal immigrants were taking the Act to extremes by exploiting the section which gives them a right to a family life.

Claws out: Ken Clarke

Mr Clarke, who is due to receive a recort on the European Convention on Human Rights, said the Home Secretary had failed to consult him before making her remarks.

He said: “When I found out what these examples are that have upset her, I will probably find that she agrees with me. It is these daft misinterpretations of the Act which are giving the whole thing a bad reputation, when we should be a force in favour of human rights and individual liberty in the modern world, not in any way resiling from it.”

The North-South divide is wider than at any time since the 1980s – with a huge gap in unemployment levels, school standards and health.

It presents a golden opportunity for David Cameron to succeed in Labour’s traditional heartlands by tackling this age-old problem.

But what can the Tories do for the North? Tonight we will attempt to answer that question at a fringe meeting at the Conservative party conference in Manchester.

Angel of the North statue.

I will be joining a panel of fellow Northerners to discuss what action can be taken to bridge the traditional gulf over the next few years.

With the electoral battleground moving further north, we will be asking why the Tories did so badly in the North at the last election and how they can do better next time.

Is it time for the government to have a proper strategy for the poorest counties in the land? And at a time when public services are being cut, what hope is there for a region which relies so heavily on them for work?

The panel includes Manchester MP Graham Brady, YouGov pollster Anthony Wells, Sir Richard Leese, the leader of Manchester City Council and David Skelton, deputy director of Policy Exchange think tank, who are organising the event.

The event kicks off at 5.15pm tonight in the Novotel Centre, 21 Dickinson Street, Manchester.